Quotations from Key Academic Literature - The Golden Age of Capitalism PDF

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Selected useful quotations from key academic literature on The Golden Age of Capitalism...

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POLI20711 The Golden Age of Capitalism

ESSAY LITERATURE

Ruggie, John Gerald (1982). “International regimes, transactions, and change: embedded liberalism in the postwar economic order”, International Organisation 36 (2), pp. 379-415.

„(...) the formation and transformation of international regimes may be said to represent a concrete manifestation of the internationalisation of political authority.” (380) „(...) characterise the international economic order by the ’embedded liberalism’” (382-383) „Conventional structural arguments, whether Realist or Marxist, see transnationalisation as a direct reflection of hegemony: high levels of trade and capital flows obtain under the pax Britannica and the pax Americana. (...) Conventional liberals, on the other hand, hold that high levels of trade and capital flows will obtain only if there is strict adherence to open international economic regimes, so that these become virtually determinative. Neither formulation is satisfactory.” (383) „We could have a situation in which power and purpose covary positively (e.g., Bretton Woods). There remains the situation of no hegemon but a congruence of social purpose among the leading economic powers (albeit imperfectly, the post-1971 international economic order illustrates this possibility).” (384) „(...) the earliest measures undertaken in order to free trade were to dismantle prohibitions on exports, prohibitions that had restricted the outward movement of materials, machinery, and artisans. The bulk of these prohibitions was not removed until well into the 1820s and 1830s, and in some instances even later.” (385) „The image of the market became an increasingly captivating social metaphor and served to focus diverse responses on the outcome of free trade. And unless one holds that ideology and doctrine exist in a social vacuum, this ascendancy of market rationality in turn must be related to the political and cultural ascendance of the middle class.” (386) „The new international economic order that would emerge from World War II, Polanyi concluded, on the one hand would mark the end of ’capitalist internationalism,’ as governments learned the lesson that international automaticity stands in fundamental and potentially explosive contradiction to an active state domestically, and, on the other hand, the emergence of deliberate management of international economic transactions by means of collaboration among governments.*” (387) *Polanyi, K., The Great Teansformation, esp. Ch 2 and 19-21. „(...) a new threshold had been crossed in the balance between ’market’ and ’authority,’ with governments assuming much more direct responsibility for domestic social security and economic stability.” (388) „(...) it is clear that after World War I there was a growing tendency ’to make international monetary policy conform to domestic social and economic policy and not the other way round’ *.” (390) *Nurkse, International Currency Experience, p. 213.

„Opposition to economic liberalism, nearly univrsal outside the United States, differed in substance and intensity depending upon whether it came from the Left, Right, or Center, but was united in its rejection of inumpeded multilateralism. The task of postwar institutional reconstruction (...) was to maneuver between these two extremes and to devise a framework which would safeguard and even aid the quest for domestic stability without, at the same time, triggering the mutually destructive external consequences that had plagued the interwar period. This was the essence of the embedded liberalism compromise: unlike the economic nationalism of the thirties, it would be multilateral in character; unlike the liberalism of the gold standard and free trade, its multilateralism would be predicated upon domestic interventionism.” (393) „(...) the erection of a ’double screen’ (...) to cushion the domestic economy against the strictures of the balance of payments. Free exchanges would be assured by the abolition of all forms of exchange controls and restrictions on current transactions. Stable exchanges would be secured by setting and maintaining official par values, exopressed in terms of gold. The ’double screen’ would consist of short/term assistance to finance payments deficits on current account, provided by an International Monetary Fund, and, so as to correct ’fundamental disequilibrium,’ the ability to exchange rates with Fund concurrence.” (395)

POLI20711 The Golden Age of Capitalism

ESSAY LITERATURE

„Once negotiations on postwar commercial arrangements got under way seriously, in the context of preparations for an International Conference on Trade and Employment, the principles of multilateralism and tariff reductions were affirmed, but so were safeguards, exemptions, exceptions, and restrictions – all designed to protect the balance of payments and a variety of domestic social policies. The US found some of these abhorrent and sought to limit them, but even on so extraordinary an issue as making full employment an international obligation of governments it could do no better than to gain a compromise.” (396) „The General Agreement on Tariffs and Trade [GATT] made obligatory the most-favoured-nation rule, but a blanket exception was allowed for all existing preferential arrangements, and countries were permitted to form customs unions and free trade areas.” (397) „(...) our governments are likely to encourage an international division of labour based on the functional differentiation of countries that reflects their comparative advantage. Trade among them therefore would be socially highly profitable. Now imagine the same governments under similar circumstances, the only difference being that they are committed to embedded liberalism rather than to laissez-faire. (...) governments so committed would seek to encourage an international division of labour which, while multilateral in form and reflecting some notion of comparative advantage (and therefore gains from trade), also promised to minimise socially disruptive domestic adjustment costs as well as any national economic and political vulnerabilities that might accrue from international functional differentiation.” (399) „The great bulk of international economic transactions since the 1950s shows very definite patterns of concentration. The growth in trade has exceeded the growth in world output (...) Within this general category, some two-thirds of the increase in trade from 1955 to 1973 is accounted for by ’intracontinental’ trade, that is, trade within western Europe and within North America. (...) On the financial side, international investments have been rising even more rapidly than world trade (...) All of this stands in stark contrast to the half-century prior to 1914. Intercontinental trade was higher. Intersectoral trade dominated.” (400-401) "The 1970s witnessed important changes in central features of the postwar regimes for money and trade. (...) the decline of US hegemony is most often adduced as the causa causans of these changes." (404) "On the monetary side, the major changes that issue are the end of the dollar's convertibility into gold and the adoption of floating rates of exchange, both in violation of the original Articles of Agreement. On the trade side (...) the perceived discontinuities (...) are characterised generally as 'the new protectionism' and include the proliferation of nontariff barriers to trade and violations of the principle of nondiscrimination, in the form of domestic interventions as well as internationally negotiated export restraints. In both cases a weakening of the central institutions, the IMF and the GATT, is taken to reflect the same syndrome." (405) "(...) orthodox liberalism has not governed international economic relations at any time during the postwar period." (405) "(...) the liquidity provisions of Bretton Woods proved inadequate, even though (...) an adequate supply of international liquidity was one of its cardinal principles. The growing volume of international trade increased liquidity requirements, as did the growing magnitude of speculative pressure on exchange rates. (...) In 1958, just as the Europeans were resuming full convertibility of their currencies, US gold reserves fell permanently below US overseas liabilities." (407) "Throughout the 1960s, a seemingly endless series of stop-gap measures (...) were deigned to make gold conversion financially unattractive, to increase the capacity of the IMF to supply liquidity, and to increase the capacity of central banks to neutralise the flow of speculative capital. The US also undertook limited domestic measures to reduce its payments deficits and pressured surplus countries to revalue their currencies. By 1968, however, the dollar had become in effect inconvertible into gold; it was declared formally inconvertible in 1971." (408)

POLI20711 The Golden Age of Capitalism

ESSAY LITERATURE

Office of the Federal Register (1972). Richard Nixon, containing the public messages, speeches and statements of the president - 1971 (Washington: US Government Printing Office), pp. 886-890.

"We must protect the position of the American dollar as a pillar of monetary stability around the world." (888) "The strength of a nation’s currency is based on the strength of that nation’s economy – and the American economy is by far the strongest in the world." (888) "I have directed Secretary Connally to suspend temporarily the convertibility of the American dollar except in amounts and conditions determined to be in the interest of monetary stability and in the best interests of the United States." (888) "The United States has always been, and will continue to be, a forward-looking and trustworthy trading partner. In full cooperation with the International Monetary Fund and those who trade with us, we will press for the necessary reforms to set up an urgently needed new international monetary system. Stability and equal treatment is in everybody’s best interest." (888) "I am taking one further step to protect the dollar, to improve our balance of payments, and to increase jobs for Americans. As a temporary measure, I am today imposing an additional tax of 10 percent on goods imported into the United States. This is a better solution for international trade than direct controls on the amount of imports. This import tax is a temporary action. It isn’t directed against any other country. It is an action to make certain that American products will not be at a disadvantage because of unfair exchange rates. When the unfair treatment is ended, the import tax will end as well." (888) Harvey, David (1990). The Condition of Postmodernity: an enquiry into the origins of cultural change (Oxford: Basil Blackwell).

“Ford likewise did little more than rationalise old technologies and a pre-existing detail division of labour, though by flowing the work to a stationary worker he achieved dramatic gains in productivity. F. W. Taylor’s The Principle of Scientific Management – an influential tract which described how labour productivity could be radically increased by breaking down each labour process into component motions and organising fragmented work tasks according to rigorous standards of time and motion study (…)” (125) “What was special about Ford (and what ultimately separates Fordism from Taylorism), was his vision, his explicit recognition that mass production meant mass consumption, a new system of the reproduction of labour power, a new politics of labour control and management, a new aesthetics and psychology, in short, a new kind of rationalised, modernist, and populist democratic society.” (125-126) “The Italian communist leader, Antonio Gramsci (…) drew exactly that implication. Americanism and Fordism, he noted in his Prison notebooks, amounted to ‘the biggest collective effort to date to create, with unprecedented speed, and with a consciousness of purpose, unmatched in history, a new type of worker and a new type of man.’ The new methods of work ‘are inseparable from a specific mode of living and of thinking and feeling life.’” (126) “Ford believed that the new kind of society could be built simply through the proper application of corporate power. The purpose of the five-dollar, eight-hour day was (…) coincidentally meant to provide workers with sufficient income and leisure time to consume the mass-produced products the corporations were about to turn out in ever vaster quantities.” (126) “So strongly did Ford believe in corporate power to regulate the economy as a whole, that he increased wages with the onset of the great depression in the belief that this would boost effective demand, revive the market, and restore business confidence.” (126) “Ford tried to (…) push[ing] his workers to supply the greater part of their own subsistence requirements. They ought, he argued, to cultivate vegetables ion their spare time in their own gardens (…) In insisting that

POLI20711 The Golden Age of Capitalism

ESSAY LITERATURE

‘self-help is the only means of combating the economic depression’ Ford here reinforced the kind of controlled, back-to-the-land utopianism (…)” (127) “It took a major revolution in class relations – a revolution that began in the 1930s but which came to fruition only in the 1950s – to accommodate the spread of Fordism to Europe. The second major barrier to be overcome lay in the modes and mechanisms of state intervention. A new mode of regulation had to be devised to match the requirements of Fordist production and it took the shock of savage depression and the near-collapse of capitalism in the 1930s to push capitalist societies to some new conception of how state powers should be conceived of and deployed.” (128) “The problem of the proper configuration and deployment of state powers was resolved only after 1945. This brought Fordism to maturity as a fully-fledged and distinctive regime of accumulation. As such, it then formed the basis for a long postwar boom that stayed broadly intact until 1973. During that period, capitalism in the advanced capitalist countries achieved strong but relatively stable rates of economic growth. Living standards rose, crisis tendencies were contained, mass democracy was preserved and the threat of inter-capitalist wars kept remote. Fordism became firmly connected with Keynesianism, and capitalism indulged in a splurge of internationalist world-wide expansions that drew a host of de-colonised nations into its net.” (129-131) “The postwar period saw the rise of a series of industries based on technologies that had matured in the inter-war years and been pushed to new extremes of rationalisation in World War II. Cars, ship-building, and transport equipment, steel, petrochemicals, rubber, consumer electrical goods, and construction became the propulsive engines of economic growth, focused on a series of grand production regions in the world economy – the Midwest of the United States, the Ruhr-Rhinelands, the West Midlands of Britain, the TokyoYokohama production region. The privileged workforces in these regions formed one pillar of a rapidly expanding effective demand. The other pillar rested on state-sponsored reconstruction of war-torn economies, suburbanisation particularly in the United States, urban renewal, geographical expansion of transport and communications systems, and infrastructural development both within and outside the advanced capitalist world. Co-ordinated by way of interlinked financial centres – with the United States and New York at the apex of the hierarchy – these core regions of the world economy drew in massive supplies of raw materials from the rest of the non-communist world, and reached out to dominate an increasingly homogeneous mass world market with their products.” (132) “The phenomenal growth that occurred in the postwar boom depended, however, on a series of compromises and repositionings on the part of the major actors in the capitalist development process. The state had to take on new (Keynesian) roles and build new institutional powers; corporate capital had to trim its sails in certain respects in order to move more smoothly in the track of secure profitability; and organised labour had to take on new roles and functions with respect to performance in labour markets and in production processes. The tense but nevertheless firm balance of power that prevailed between organised labour, large corporate capital, and the nation state, and which formed the power basis for the postwar boom, was not arrived at by accident. It was the outcome of years of struggle.” (132-133) “The defeat of the resurgent radical working-class movements of the immediate postwar period, for example, prepared the political ground for the kinds of labour control and compromise that made Fordism possible.” (133) “Large corporate power was deployed to assure steady growth in investments that enhanced productivity, guaranteed growth, and raised living standards while ensuring a stable basis for gaining profits. This implied a corporate commitment to steady but powerful processes of technological change, mass fixed capital investment, growth of managerial expertise in both production and marketing, and the mobilisation of economies of scale through standardisation of product. (…) The decisions of corporations became hegemonic in defining the paths of mass consumption growth, presuming, of course, that the other two partners in the grand coalition did whatever was necessary to keep effective demand at levels sufficient to absorb the steady growth of capitalist output.” (134)

POLI20711 The Golden Age of Capitalism

ESSAY LITERATURE

“The state, for its part, assumed a variety of obligations. To the degree that mass production requiring heavy investment in fixed capital in turn required relatively stable demand conditions to be profitable, so the state strove to curb business cycles through an appropriate mix of fiscal and monetary policies in the postwar period. Such policies were directed towards those areas of public investment – in sectors like transportation, public utilities, etc. – that were vital to the growth of both mass production and mass consumption, and which would also guarantee relatively full employment. Governments likewise moved to provide a strong underpinning to the social wage through expenditures covering social security, health care, education, housing, and the like. In addition, state power was deployed, either directly or indirectly, to affect wage agreements and the rights of workers in production. (…) But what is remarkable is the way in which national governments of quite different ideological complexions – Gaullist in France, the Labour Party in Britain, Christian Democrats in West Germany, etc. – engineered both stable economic growth and rising material living standards through a mix of welfare statism, Keynesian economic management, and control over wage relations.” (135) “Postwar Fordism has to be seen, therefore, less as a mere system of mass production and more as a total way of life. Mass production meant standardisation of product as well as mass consumption; and that meant a whole new aesthetic and a commodification of culture that many neo-conservatives (…) were later to see as detrimental to the preservation of the work ethic and other supposed capitalist virtues. Fordism also built upon and contributed to the aesthetic of modernism – particularly the latter’s penchant for functionality and efficiency – in very explicit ways, while the forms of state interventionism (…) and the configuration of political power that gave the system its coherence, rested on notions of a mass economic democracy welded together through a balance of special-interest forces.” (135-136) “Postwar Fordism was also very much an international affairs. The long postwar boom was crucially dependent upon a massive expansion of world trade and international investment flows. (…) This opening up of foreign investment (chiefly in Europe) and trade permitted surplus productive capacity in the United States to be absorbed elsewhere, while the progress of Fordism internationally meant the formation of global mass markets and the absorption of the mass of the ...